High-Tech Entrepreneurs vs. Entrepreneurs in Traditional Industries: Similarities and differences in family portraits and passion quests
Orenya Yaffe-Yanai, Tamar Milo and Gilat Kaplan
Ami, Israel and Private Practice, Israel
A recent study of the differences between entrepreneurs and managers of family-owned businesses (Yanai, Yanai & Milo, 2007), concluded that entrepreneurs and managers tend to come from different family environments, that they had distinct motivations and passion quests and that the consulting process for these two groups should be equally distinctive. These findings supported the notion that family dynamics reveal people’s core emotional pain, which drives their personal quests and motivation, and leads to the roads along which they develop the legacies of past generations (Yanai, Yanai & Milo, 2007).
This had become a corner stone in the authors’ consulting practice. This consulting practice has demonstrated time and again that uncovering family dynamics teaches about the distinctive sources of people’s occupational motivations and uncovers the meaning of their lifelong passion quests. Consulting work with entrepreneurs from various business settings indicated not all entrepreneurs were alike and that in particular, high-tech entrepreneurs might have different characteristics than their colleagues in more traditional industries.
Entrepreneurs have been the object of research in various disciplines. They have been recognized for their influence on economic and social processes, and thus as the creators of “new worlds” (Czarniawaka & Wolff, 1991). They have been described as innovators and accelerators for changes that not consistent with the accepted social viewpoints (Schumpeter, 1965). Scholars consider entrepreneurs the “knights of change” (Drucker, 1985) and “creators of novelties and progress” (Schumpeter, 1965).
The entrepreneur is described as an individual who is “instrumental to the conception of the idea of an enterprise and its implementation…”(Kets de Vries, 1996). De Vries viewed the entrepreneur as characterized by managing-coordinating innovation and risk taking and as having the ability to do extraordinary things by finding new opportunities.
Risk taking stems, at least in part, from the entrepreneur’s ability to deal with ambiguity and complexity. Risk taking means involves facing psychological and economic hazards. Kets de Vries’ work is part of a growing body of research on entrepreneurs’ personality and family dynamic (Kaplan, 2007, Kets de Vries, 1996, Pines, 2003, Pines, Dvir, Sadeh & Yanai; 2002, Strenger, 2004 as well as Barkan (Chapter Ch. 11 and Milshtein Ch. 12 of this volume). However, it is noteworthy that some scholars have not agreed that entrepreneurs have a distinct personality profile (e.g., Gartner, 1988). Nevertheless, most scholars in the field reported data supporting the notion of entrepreneurs have a unique and distinct personality.
The chapter is based on organizational and personal counseling with hundreds of managers and entrepreneurs, both from high tech ventures in fields such as IT, communication, medical instruments and biotech and traditional industries such as food, retail, real estate and transportation. The reasons for seeking consultation varied from personal counseling in times of crisis or change, management consultation in periods of expansion and counseling on family business issues. Table 1 presents data regarding the consultation with the entrepreneurs on whom the chapter is based..
Table 1: Features of the consultation processes
|3-5 meetings, 2 hrs each. Sometimes a year long process or more.|
|Dynamic, analytic, system oriented, interactive.|
Designed to enhance insight into client’s personality and behavioral patterns, as they are reflected in his instrumental and emotional interactions with himself, his family, his organization and his goals.
|Processes||Relationship with consultant (or consultants when the consultation involved a family or a team) and clients is established.|
The sample involved only male entrepreneurs because female entrepreneurs differed from their male colleagues. In particular, they tended to be their “fathers’ daughters” have “absent mothers”, and are better managers.
The consultation approach had been dynamic, interactive, analytic, and system oriented. It was designed to enhance clients’ insight into their personality and behavior patterns, as these were reflected in the clients’ instrumental and emotional interactions with his family, his organization and the management of the self and his goals. Analysis of the counseling processes revealed two distinct clusters: that of High Tech entrepreneurs (HTEs) and that of entrepreneurs in traditional industry environment (TIEs). A comparison of about 40 HTEs and 40 TIEs who were involved in counseling (ranging from 3-20 sessions) showed rather similar demographic characteristics taht are presented in Table 2.
Table 2. Demographic characteristics of 40 TIE’s and 40 HTE’s
|Ownership||Partner with wife or one partner||A team of partners who know each other (e.g., military service, youth movement, school)|
|Education||Some with no post high-school education others with some undergraduate studies.||Graduate degrees. Sometimes post graduate studies.|
|Marital Status||Mostly married||Married/divorced|
|Business success||Successful entrepreneurs but mediocre managers||Successful entrepreneurs good managers, often serial entrepreneurs|
An analysis of the HTEs and the TIEs in terms of their parents’ personalities, modes of child-rearing, parent-child relations, sibling relations, habits of play in childhood and early adolescence, patterns of friendships, work style, sources of energy and passion quests (the variables that were used in the comparison between entrepreneurs and managers by Yanai, Yanai & Milo, 2007) attempted to provide answers to the following questions:
- What are the similarities and differences between THE and TIEs in family make-up, sources of energy, and interpersonal relations.
- If there are differences between the two groups, what makes each group “tick”? What are the basic sources of motivation, or passion quest for each group?
- How would the differences found between the two groups influence the consultation process?
The analysis of the case studies indicated that both types of entrepreneurs shared some common characteristics of family background, family dynamics, and personality. They came from families that expected from them high and unusual achievements. Their mothers were usually dominant and controlling. In almost all cases, the families were not very sensitive to the child’s emotional needs. He was left to himself, free to create his own world within which he could feel omnipotent. As adults they were hard workers, very high achievers, charismatic, perfectionists and independent. Their antagonism to authority coupled with their need to create their “own territory/kingdom”, directed them toward starting their own enterprise. These entrepreneurs were not only “instrumental to the conception of the idea of an enterprise” (Kets de Vries, 1996), but to the conception of their own idea for the enterprise. Only by creating their own “world”, could they assure control, rather than having to submit to another authority figure, or to function in a world that was not their creation.
Both types of entrepreneurs tended to avoid emotional pain and deny it by transforming it in their inner world to senses, drives and instincts. Both can be characterized as “people of extremes” and “total people”. Often they needed to invest great effort to distinguish between family and work, and between themselves and their products.
Despite of the above similarities, as other researchers have noted (e.g., Miner, 2000) entrepreneurs are not a homogeneous group. Indeed, a comparison between the HTEs and the TIEs revealed several important differences in family backgrounds and personality.
High Tech Entrepreneurs (HTEs)
The high Tech industry develops and uses novel, advanced technology in a variety of fields such as communication, information technology, medical instruments, biotech, military, alternative energies and agriculture. The level of novelty in the technology used may vary, but an advanced level of technical know-how and innovation characterizes all high-tech enterprises. Novelty is, therefore, common in high-tech’s social and political environment (De Fontenay & Carmel, 2002; Shenhar, Dvir, Milosevic, Mulenburg, Patanakul, Reilly, Ryan, Sage, Sauser, Srivannaboon, Stefanovic & Thamhain, (in Press)).
For over two decades, high-tech companies have spearheaded world economy growth and development, changing economic and social reality. It was considered by investors and economists as “the” industry. Its leaders’ therefore, were acknowledged as cultural heroes (Pines, Levy, Ustasi & Hill, 2005). Understanding who they are and what motivates them became, therefore, a natural subject for investigation.
Many of the HTEs grew up in a middle-class home (or higher), in which both parents were functional and involved. They tended to be the chosen child and their mother’s favorite. Typically, their father was actively involved in their education, or at least supervised it closely. His son’s achievements (academic or athletic), were important to the father, and he was willing to invest time and resources toward that end. Emotionally, however, the father was absent. As a role model he conveyed a double message: “be careful. Do not risk as much as I did. Yet, strive for the best, achieve, prosper, fight for the realization of your ideas, develop your own mind..”.
The mother provided handling and management and her household was well organized and ran smoothly. She supervised her children’s behavior and was connected and engaged socially. She was a dreamer, but a practical one. She held middle class values and stressed achievements, efficiency, manners, appearance and knowledge. To that end, she would expose her children to the world arounded them, either by telling them stories, taking them to museums, or going out on hikes and other adventures. The HTE to be was her favorite son, thus she expected him to fulfill her dreams, which were often enmeshed with his curiosity and imagination: “Let your curiosity speak and free your imagination to flow”, was often the mother’s message. The HTEs’ mother was attentive to his emotional development, but did not necessarily provide a stable emotional holding. All in all the HTE’s family was well functioning. His siblings were usually successful, and siblings’ relations were rather adaptive and free of parental manipulation.
As an adult, the HTE dealt mostly with concepts and processes. The objects that were his enterprise’s products were for him the consequences or derivatives of his concepts and ideas. He was his products and concepts. He identified less with his company. “I am my products”, stated Steve Jobs. The HTE often feels that his work is “fun”. Dealing in the virtual world may feel to him like a game. He often engaged in it endlessly, sometimes even till the point of physical exhaustion, like a child whose game was not stopped by his Mom. It was often a direct continuation of the games he played in his childhood.
This play-like activity, which he enjoys tremendously, is in fact hard work, but different in nature than the “hard work” of the TIE. The HTE’s activities (“games”) are carried out in a tidy environment, that may feel “sterile” to the TIE who is used to production lines and material objects, produced in an atmosphere of physical effort and sweat. The sensuality and intuition of the TIE is replaced here by a more sterile, intellectual, often abstract, approach that follows rules and develops innovations, within a conventional setting of appearance, social norms and organizational culture. The HTE’s mission, like that of his traditional-economy colleague, is to add value to the world. But he accomplishes it by improving or upgrading existing products and processes, transforming them into surprising innovations. His entrepreneurship is geared toward a synthesis between novelty and efficiency, created in a setting which he controls as the leader in authority.
HTEs create products for the whole world. Ted Turner who brought 24 hours CNN news to every home, or Bill Gates who gave the world a new standard way for computing, documenting and connecting, are cases in point. They are the “source of light”, the “annunciation”. Traditional entrepreneurs, on the other hand, place themselves in the center of the world, so to speak. They need to create a world in which they manufacture products that are being delivered to others.
HTEs are not loners. They may be described as living in “gangs”, or rather in small teams of close friends (sibling like), who are doing things together since childhood or college age. They trust each other, communicate well with one another and share more or less the same life-style (clothes, houses, cars, music and vacations). Their attachment is to one another and to the excitement of innovations, and not so much to the enterprise they have founded. Consequently, the HTE is willing to make an exit from his enterprise, when the right opportunity materializes.
The HTEs’ wives tend to be “environmental mothers” (Winnicott, 1965). They are more independent, less involved in their spouses’ careers. The families they raise are more flexible and open to family developments and to changes. Divorces are often part of these families’ norms and they cope with it in a functional manner and with a sensitive attitude. They create “sensible arrangements”, for all parties involved. The family of the TIE, on the other hand, is a very symbiotic, where loyalty and submissiveness are dominant. So is often his wife.
For HTEs the consulting process is a purposeful project designed to achieve a specific goal. They look for an instrumental consultant, who will add concrete value. They tend to respect the “value for money” equation, avoiding an emotional attachment, which may prove disappointing. When the consultant no longer performs to their satisfaction, they terminate the engagement with no hesitation.
High Tech Entrepreneur- a case study
Dan was the first born son of two immigrants who succeeded in establishing themselves in the new country as a middle class family, although it did not quite meet their aspirations. His father was an engineer and his mother a teacher.
Dan’s father was particular about his son’s education. He was interested in the details of the school’s curriculum and set the highest standards for his son. In addition, Dan was involved in a variety of extra-curricular activities, under Dad’s constant supervision. Dan’s achievements were his father’s main source of pride. Dan’s social and emotional life was of much less interest to his father and he did not know much about that part of his son’s life.
Dan’s mother valued academic achievements as well, but focused mainly on the management of her household. She was an efficient and effective housewife, meticulous and well organized. In addition, she was active in the family’s social life. She played Bridge, organized birthday parties for family members, and involved her children in these activities. Dan had more frequent conflicts with his mother, than with his father.
Looking back at his childhood, Dan said that he learned to manage and to dream from his mother: “We were two managers in the same planet.” From his father he learned entrepreneurship and strategy. “Father brought me ideas and games to play with. “He taught me to ask questions all the times”. As for mother, “she taught me about the world outside of school: music, trips, the theatre and archeology”. Mother took for granted his academic success, but was highly demanding in all other areas. She wanted him to excel beyond his school work. “I sensed that for her, the sky was the limit”. He remembered very vividly how often his mother “put me in her Jeep and we would travel around the countryside, where she would share with me lots of stories about places and people”.
Dan’s brother is close to him and often serves as a consultant, but is not Dan’s partner. Dan works well with consultants, changing them according to their area of expertise and his pragmatic needs.
Dan manages his international enterprise well, combining entrepreneurship and sound management. He adores his products and feels that the business is his platform for personal growth. Dan views his life as filled with interest, curiosity and affluence. His main dilemmas lie in finding balance between his business and his personal and family life.
Traditional Industry Entrepreneur (TIE)
Emotional child neglect is probably the most salient parameter characterizing this group of entrepreneurs. Many of them lost their fathers when they were in their early teens. Others were “psychological orphans”, as their fathers were practically absent from their lives, due to sickness, traumatic events or loss of wealth and status, which rendered them incapable of serving as authority figures for their children. Mothers were typically self centered dreamers of unfulfilled dreams. Their household management was unorganized and often chaotic. Mother lived in a fantasy without rules and order. The TIE to be, in many cases her chosen son (the expected “savior”), was her inspiration and “her man”. He was supposed to take care of her and of the family. Such a child became a self made man, a creator of his own world, who aspired to make sense of a chaotic world. The mother was usually unable to see his emotional needs, much less to contain them. His mode of relating to the world is one of survival: he perceives situations as stressful, expects obstacles and continuously encounters them.
TIEs often came from low socio-economic environment. The reality of their childhood was tough, encouraging them to escape to a world of fantasies and dreams. In the absence of consistent authority figures, they were free to create visual and sensual “make believe” scenarios that served as a replacement for a grim reality. These fantasy scenarios were also the basis for the world they were to create in their businesses.
As adults, TIEs were sensual and intuitive. They were hard workers, who tried (usually in vein), to compensate for an inner sense of emotional and physical poverty and emptiness. Trust was often an issue for them, both within their family and in their business. The business they founded and its organization provided a sense of belonging, which they did not have elsewhere, making it “their kingdom” and thus extremely difficult to let go off.
For the TIE, the consulting process may touch the deep wound of parenthood. As an adult, the TIE looks for an ideal parent (mother, but possibly a father) who would “educate, guide or feed” him. His attitude toward the consultant is, therefore, one of short-lived worship, neediness and dependency, which are inevitably followed by disappointment and break-up of the relationship. The hope that someone would fill the void within proves to be an illusion, time after time. Once disillusioned, TIEs may be abusive to the consultant.
A Traditional Industry Entrepreneur – a case study
Steve was 60 years old, married to Nora, his business partner in the luxury items retail business. They had four sons. In his family of origin, Steve was the third child in a family of six children and a top student who always received the best grades. His sisters helped with household chores and family management, but Steve’s charisma and determination placed him at the center of the family. From an early age he contributed to the household income and was his mother’s partner in decision making and her “right hand”. “Mom loved my weaker, suffering brother more than me, but her respect was reserved for me. She listened to me and I felt that without me she was sort of lost. My brothers and sisters fought constantly, which was traumatic for me, as I cannot stand conflicts”. None of Steve’s siblings developed a meaningful career. Two of them had mental problems as adults.
Steve’s father was a passive man who lost his chance for self fulfillment when he immigrated to Israel in the 50’s. Since that time he worked as a mid level government employee in a job that neither challenged nor compensated him satisfactorily. His communication with his children was minimal. He tended not to get involved in their lives and aspired only that they behave well and support their parents.
Steve’s mother was a dynamic and controlling woman. She was smart, tense, and slightly hysterical. Although her own family was of a low socio-economic background, she dreamed of achievements and status. Over the years she became disappointed with her unfulfilled dreams, as much as with her husband. She never held a job, yet the house was not organized (in terms of mealtimes, order and comfort). The children practically educated each other.
Steve built a successful business in which he employed several of his family members (not necessarily by choice). He continued to be the family’s backbone. Yet, in spite of his business success, Steve retained a sense of insecurity toward his family, as well as toward the world. He hated family conflicts and felt poorly equipped to handle them. He usually reverted to monetary means in solving conflicts within his family.
Steve led his life in a way that could be described as enlightened dictatorship. He meant well and wanted to do well. He was a giving father who spoiled his children, but did not prepare them for their future responsibilities in the business. In his professional life he used consultants, but made sure he would be the one to say the last word. His basic life experience was one of constant struggle for survival, despite a reality of fairly stable life.
With the passing of years, the business became a burden to Steve. He loved the entrepreneurial part but was not a good manager. Yet, he could not give up control, nor bring himself to sell the business. The duality in his relationship with the business mirrored those in his family – both were perceived as difficult and burdensome, but necessary as part of his extended identity. The business was him and he was the business.
An evolution-based approach to the comparison between HTEs and TIEs.
The coping mechanisms one applies in life in general, and in the world of work in particular, are acquired mostly through patterns of parental child rearing (Erikson, 1950). Aspects of parent-child interaction during childhood, such as child handling, management of household, enforcement of authority, rule setting, expectations, conflict solving, imagination, time considerations, control, punishment, support and emotional involvement, become the model for attitudes and coping mechanisms later in life. It is during childhood that the basic motivations, losses and wounds are formed, shaping the adult person’s career quests, modes of gratification and styles of operation.
The evolution of parenthood in the last 3-4 generations, together with the dramatic changes in the world of work during the same period of time, have created parallel processes which are manifested in the nature of entrepreneurship and management. The quality of parenthood, as manifested in the functional child-rearing in parents’ emotional needs and awareness and involvement in the child’s life, have improved. These early management habits adopted in the primary organization, the family, are carried over to the adult’s management and entrepreneurial patterns.
The comparison between the HTEs and the TIEs, together with the data presented earlier (Yanai, et. al. 2007), suggest that families of HTEs, TIEs and managers can be placed along a continuum of family development. On one end of the continuum are “orphan” families, in which the father was physically or emotionally absent. Families in which both parents tended to the child’s physical and emotional needs (whether they live under the same roof or not), are on the other end of the continuum. In between, there are various degrees of emotional neglect.
People who grew up in a family atmosphere that approached the “orphan” end of the continuum, have a strong need to be in control, in order to avoid living in chaos. Yet, they have an urge to create their own world, rather than to adapt to an existing state of affairs. They are loners and even if their spouse is their partner, it is an unequal partnership, in which they are in total command. The organization they build is their family substitute. If an employee leaves the company, he is considered by them as traitor.
HTEs come from families in which emotional neglect existed, but to a lesser degree. Like TIEs, in their childhood they were left to themselves, free to create a novel world. They are antagonistic authority figures, since their fathers were demanding but not emotionally satisfying. However, they are more trusting, capable of maintaining long term relations with a small group of trusted “buddies”. Like TIEs their need to be acknowledged, to make a difference and leave a mark is insatiable. They are narcissistic and totally committed to their work. Yet, the family substitute for them is not the enterprise, but the “gang”. They are capable of letting go of the enterprise, in order to continue together with their “gang” to a new venture.
A comparison of the family portraits of HTEs with that of managers in traditional industry settings (Yanai, Yanai & Milo, 2007), revealed similarities between the two groups. As opposed to TIEs, HTEs and managers come from middle class homes and functioning families. Their parents were present in their childhood, monitored their education, handled their physical and cognitive needs and set rules and expectations. However, HTEs’ emotional needs were mostly not seen, or ignored. While their fathers were involved in their academic and athletic development, they were absent from their emotional world. Their mothers provided them with a stable environment and adequate physical handling, but not with emotional support, or handling.
The managers described by Yanai, Yanai and Milo (2007) and the small business owners described by Schwarts and Malach-Pines (2007), seem to have a stronger and more positive identification with their fathers. They also described their mothers more positively than HTEs. Managers in traditional industry grew up with parental criticism and high expectations. Consequently, their mission was not to create novelty, but rather, to improve existing products and processes.
It may be argued that the severe parental neglect (consisting of paternal absence and maternal chaotic handling), which have been the breeding ground for TIEs, was more frequent among families in previous generations. Even in “normative” families, fathers were mostly occupied with bread winning, fathers and mothers applied a clear division of roles rather than a team approach, and mothers were rarely able to search for self fulfillment, or self improvement. On the other hand, in the last two decades there is a greater cultural emphasis on the individual’s emotional wellbeing, on self fulfillment and on team-work, among couples, within families and in organizations. People are less lonely, both within and outside their families. World figures such as US President Obama, who grew up with a myth of a great father, who was physically absent from his life, may still suggest that the strong need to recreate a world and to leave a mark, can be fuelled by the insatiable deprivation and incurable pain of an orphan childhood, coupled with high expectations on the part of the mother. Maybe future world leaders, or rather “political entrepreneurs” will come from a family characterized by team-work, of the type Obama and his wife seem to portrait.
One can speculate about the future breed of managers, based on an extrapolation of the continuum of parenthood, presented above. The older model of TIEs who came from chaotic families and ran their enterprises with guts but often with poor management capabilities, are replaced by HTEs who have been raised in better functioning homes, by more fulfilled parents, who let their children dream and realize their dreams, not necessarily out of deprivation and neglect. As entrepreneurs, these children have higher formal education and they are more effective managers. Their offspring will have yet another family portrait, which will undoubtedly shape their passion quests, their motivations and their relations to their creation and to their colleagues.
A parallel process of evolution can be seen along a continuum of interpersonal relationships and partnerships of entrepreneurs. TIEs are mostly loners, centralistic and dominant. Even if their wife (or brother), works alongside the founder since the inception of the enterprise, she (or he) is often considered “irrelevant” and does not receive credit for her (or his) contribution. HTEs, on the other hand, like to work in teams of loyal partners, who often go together from one venture to the next. At the other end of the continuum are managers, for whom building teams and developing a culture of teamwork within the organization, is a crucial element in their success.
It is interesting to note that the evolution described above is also manifested in the type of ventures and category of products each group engages in. TIEs entrepreneurship is ground-breaking. It is about creating “something” from “nothing”, reflecting their personal path from poverty, emotional deprivation and lack of holding, to affluent success. HTEs ventures are many times geared toward improving an existing product or service, upgrading, or even bringing it to perfection. It reflects a quest for a step-function leap from the “good enough” to “the perfect”. (It is note worthy that Dvir, Sadeh and Pines in Chapter One of this volume describe high-tech ventures as ranging along the dimensions of novelty, technological uncertainty, complexity and pace).
It is an evolution from entrepreneurship as means of survival, to one that produces improvement, and even excellence, a transformation from an entrepreneurship that is focused on one particular product (or family of products), to a holistic venture aimed at providing answers to a wide range of needs, to a wide range of users/clients. HTEs want to give the world service, comfort, aesthetics and functionality, all in one. Their creation has to be at a level as close to perfection as humanly possible, it has to be accessible to the masses throughout the world, possibly changing their lives. Steve Jobs is a case in point.
The comparison between tHTEs and TIEs suggests that personality traits of entrepreneurs, and the behavior patterns associated with them, are closely related to the modes of behavior in the family during childhood. The passion and source of motivation stem from the area of deprivation, or the source of the childhood wound. The need for fulfillment is shaped by and channeled during the early childhood years. The family structure and its preferred ways of dealing with the world have significant impact on people in general and on entrepreneurs in particular. However, there may be an indication of a change that occurs over time in the characteristics of entrepreneurs and in their socialization patterns. The products they fantasize and create are influenced by their creators’ personalities and by the response of the market (their audience).
HTEs are oriented toward “global products”, that meet wishes (or fantasies) of their generation, regardless of geography or culture. They are committed to providing services that protect or upgrade the well being of customers, rather than to basic, must-be products. This trend will probably continue to evolve, as new qualities of parenthood and family shape the next generation of entrepreneurs and their products.
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